Unions Say McDonald’s Restructuring Allows Less Transparency On Taxes

Posted On: May 14, 2018

BRUSSELS (Alliance News) – US fast food giant McDonald’s has reshuffled its corporate structure to make tax-avoidance practices less transparent after the EU had opened an investigation into the company’s tax schemes in 2015, a group of trade unions said Monday.

The report by a coalition of European and US trade unions is a follow-up on their 2015 investigation showing that McDonald’s had avoided EUR1 billion in corporate taxes between 2009 and 2013 from its European operations.

The European Commission launched an investigation in December 2015 focusing on tax rulings by Luxembourg that exempted McDonald’s from paying any corporate taxes on profits made from franchise royalties in Europe and Russia.

Since the launch of the EU investigation, which is still pending, McDonald’s has moved its international tax base from Luxembourg to Britain – a country that is set to leave the EU next March – and has moved the headquarters of its European franchising operations to the US, the new report found.

The restructuring, which also includes using subsidiaries in countries on the EU’s tax haven “grey list” such as the Cayman Islands, Bermuda or Hong Kong, makes McDonald’s operations “more opaque, inhibiting public scrutiny of the company’s accounts,” the report said.

“It’s clear that McDonald’s will do whatever it takes to hide its abusive tax practices from public scrutiny,” said Rocio Saenz of SEIU, a Washington-based labour union that co-authored the report.

“We urge the European Commission to vigilantly investigate McDonald’s continued tax avoidance and hold the company accountable for the damage done by its misconduct.”